The impact of optimized electricity tariff changes towards renewable energy and non‐renewable energy growth in Malaysia

• Published date: 01 June 2022
• Author: Noriza Mohd Saad,Munirah Ramli,Mohamad Taufik Mohd Arshad,Ahmad Lutfi Mohayiddin
• Date: 01 June 2022
• DOI: http://doi.org/10.1111/opec.12220

The impact of optimized electricity tariff

changes towards renewable energy and non-

renewable energy growth in Malaysia

Noriza Mohd Saad*, Munirah Ramli

**

, Mohamad Taufik Mohd Arshad

***

and Ahmad Lutfi Mohayiddin

***

*Fakulti Pengurusan dan Perniagaan, Universiti Teknologi MARA Cawangan Kelantan, Machang 18500,

Malaysia. Email: norizajasaad78@gmail.com

**College of Business Management & Accounting, Universiti Tenaga Nasional, Pahang 26700, Malaysia.

***Regulatory Economics, Strategy and Regulatory Division, Tenaga Nasional Berhad, Kuala

Lumpur 50470, Malaysia.

Abstract

The purpose of this study is to investigate the impact of electricity tariff changes towards

renewable energy (RE) and non-RE growth in Malaysia. Recently, the growth of RE explains the

interest of the world to shift the source of generating electricity towards green environmental

sustainability. Thus, the utility provider predicts a decreased demand for electricity associated with

the rise of RE and verse vice. Input–output model is utilized in this study to elaborate on the social-

economic impact using data obtained from the Department of Statistics, Malaysia. The study

focuses on the cost of production towards 124 production sectors for household expenditure from

12 types of consumer classifications. The results found a small impact on both categories, RE and

non-RE, and it is proportionally associated with a positive increase in electricity tariff. Thus, the

increase in RE did not have a big impact on the non-RE customer, leading to no impact on

electricity tariff changes.

1. Introduction

Lessening the negative impact on the environment due to rapid urbanization and the

energy supply burden is crucial in any country, especially in a developing country like

Malaysia. The promotion of renewable energy (RE) usage is pivotal in ensuring that the

above-mentioned problems can be mitigated. In realizing the sustainable development

goals (SDGs), green energy is truly needed. Solar and wind power technologies are the

most common and promising renewable energies installed in urban areas. RE

development is expected to reduce CO

2

emissions and air pollution, and at the same

time, while can save 0.2–1 per cent gross domestic product (GDP) of the Association of

Southeast Asian Nations (ASEAN) region in 2025 (B€

ohringer et al., 2017).

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